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Stocks Keep Sizzling After Payroll Pickup: U.S. Adds 236,000 Jobs

February may be a short month, but it was a pretty good stretch for the U.S. labor market and that helped Wall Street continue its winning ways Friday.

Nonfarm payrolls added 236,000 jobs, the Bureau of Labor Statistics reported Friday morning, with the private sector adding 246,000 and big gains in professional and business services, construction and health care.

The figure, well ahead of the consensus estimate of 163,000, also came with a decline in the unemployment rate to 7.7%. The lower jobless rate was a combination of several factors, but a significant portion of the dip came from 130,000 workers who dropped out of the labor force. The number of unemployed persons edged lower, to 12 million.

The average workweek inched up 0.1 hour to 34.5 hours in February, with increases in the manufacturing workweek and factory overtime. Average hourly earnings were up 4 cents to $23.82 and have rise 2.1% over the last 12 months.

Revisions to the past two months were mixed, with January’s number cut by 38,000 jobs to a gain of 119,000 and December’s figure revised 23,000 jobs higher to 219,000. The net result was 15,000 fewer jobs over the two prior months.

Friday’s employment report lends support to the belief that the economy is regaining some of the strength it lost in the fourth quarter, when quirks of government spending and a bit of a slower patch led to economic growth of just 0.1% according to the latest official estimate.

The February payrolls report “isn’t a game changer,” says Capital Economics, but in a note Friday morning the firm’s chief U.S. economist Paul Ashworth says “it adds to the evidence from the upbeat ISM surveys released earlier this week that, despite the expiry of the payroll tax cut, higher gasoline prices and government spending cuts, the recovery is gathering momentum.”

Perhaps the most important factor in the report was the 48,000 increase in construction spending. Ashworth says the gain, which continues a healthy pace over the last five months, suggests “a reflection of the rebound in homebuilding.” (See “Easy Money Is Made, Dig Deeper For Housing Bets.”)

“This may not yet be the substantial improvement in the labour market outlook that the Fed is looking for,” Ashworth writes, “but it’s moving in the right direction.”

Stocks failed to hold morning highs, but held on for a sixth-straight positive session. The Dow Jones industrial average finished with a 68-point gain to 14,397, another closing record, while the S&P 500 closed at 1,551, up 7 points and just 14 points shy of its 2007 peak. The Nasdaq gained 12 points to 3,244. The 10-year Treasury yield backed up on the improving labor data, to 2.06%.

For the week, the Dow and S&P gained 2.2% apiece, narrowly outpaced by the Nasdaq’s 2.3% advance.

Big banks remained in focus after Thursday’s release of the Federal Reserve’s stress tests. Only Ally Financial, of the 18 banks under review, fell short of the desired 5% capital ratio under a severely adverse scenario. The industry’s biggest players like JPMorgan Chase, Wells Fargo, Bank of America and Citigroup all passed, with the latter announcing it did not ask permission to increase its dividend, but that it has won Fed support for $1.2 billion in share repurchases this year.

Citi shares gained 3.6%, while Goldman Sachs and Morgan Stanley, which topped the Fed’s 5% threshold by a much narrower margin, lost 2.3% and 0.5%,respectively.

McDonald’s reported February same-store sales that fell 1.5%, but the dip was not as bad as anticipated and the Big Mac chain added 1.6%.

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So when you have 130,000 drop out of the labor force. I think the figures look less impressive. But I’m sure the liberals will cheer and the rest will not. I would take the stand that its better but not great and given the recent news of big pending layoffs. It could be the last good report for a while.

Given that conservatives were wrong on healthcare, tax cuts, and war pay offs. I think to listen to a conservative on anything after they have been wrong repeatedly is laughable. To a conservative you have to spin the good news to be ‘really not that good’ but under Bush’s losses to be ‘well it’s really not that bad.’ How about this? Obama is now already almost beating Bush’s cumulative of job creation in a little over his first term. Spin that.

WSJ: “February’s job gains will garner all the headlines, but the January report was actually revised lower. Revisions show January job growth came in at 119,000, down from initial estimate of 157,000.”

..and that many market programs [as well as the LSMedia megaphone] are driven by the initial release, not the adjustment. Obama has done this since July ’09, this is a very corrupt administration right through many of the agencies.

I hate comments, Oops, comments that say nothing. I like comments with substantial information on the topic, with flashy headlines and all or not. I got one for you. 31438 words with citations galore from experts in the field around the world. Of Indignation, Oops, Jobs Stagnation and I@elcidharth.com so sue me!

The devil in this report is the detail. What type of the jobs were created: are they part time jobs – so someone was hired do help on construction site for 3 months? how many of these jobs were created by start up (which have a risk of going bust within 3 years) or by established companies? How this will relate to the potential cuts in public sector which can be as high as 600 000 when cuts and disagreements between both parties continue and so on. I believe the outlook for US is still very bleak. Global market has not recovered. US will continue to print money at the expense of deficit with the view of bringing in growth which can only come back if both global and internal demand increases. How long can you print such a vast amount of paper dollars – we shall only see?